http://www.huffingtonpost.com/2011/...s_n_843400.html

quote:

Federal Reserve Lent To Gaddafi-Owned Bank, European Firms After Fighting Disclosure For 3 Years At a time when credit markets shunned even the most worthy borrowers, foreign banks, including one partly-owned by Muammar Gaddafi's Libya, fled to the Federal Reserve and borrowed at rock-bottom interest rates, Fed documents released Thursday show. During the height of the financial crisis in the fall of 2008, as investors and firms hoarded cash, the Fed reduced its rates to kickstart lending in the broader economy. Arab Banking Corp., a $28 billion lender now 59 percent-owned by Libya's central bank, borrowed at least $3.2 billion during this time. The Fed charged it an interest rate ranging from 2.25 percent to as low as 1.25 percent on those borrowings, regular Fed data show. AAA-rated corporations paid bondholders an average rate ranging from 5.63 percent to 6.37 percent during the same period, according to the Fed. The Fed lends money to banks at cheaper rates than the market because it intends for those funds to be distributed throughout the economy. The primary facility, known as the discount window, has been in practice since 1914. Arab Banking Corp., which can borrow from the Fed because it has a subsidiary in the U.S., was among the foreign banks that had difficulty accessing cash from other lenders during that time, leaving it to turn to America's central bank. Records show the Libyan bank borrowed its funds beginning on September 18, 2008 and lasting through at least November 13 of the same year. The daily high point came on three separate occasions in October and November, when the lender tapped the discount window for $600 million. Beginning Oct. 8, those loans were available at a 1.75 percent interest rate. A few weeks later, the rate dropped to 1.25 percent. These disclosures and more were buried in nearly 30,000 pages spread across almost 900 computer files that the Fed released to reporters under court order in response to lawsuits launched nearly three years ago by Bloomberg LP, the parent company of Bloomberg News, and Fox Business Network, the financial news television channel of Fox News. The Fed had fought against disclosing data surrounding its activities during the financial crisis. After President Barack Obama signed his financial reform package into law last July, calling for the nation's central bank to release documents on most of its lending programs, a coalition of the nation's largest financial institutions took the Fed's case to the U.S. Supreme Court in an attempt to keep the records hidden. The high court declined to hear the case, and in December, the Fed released critical details on its emergency crisis-era programs. For the first time it revealed the identities of the banks, investment firms, insurance companies, automakers, corporations, and other borrowers it flooded with more than $3 trillion in taxpayer-backed cash. But it took federal courts and two determined news organizations to force the public release of the Fed's discount-window activities during the same time. On Thursday, the Fed finally disclosed such information. Now, for the first time, the public can see which banks, from the smallest community lender to the largest Wall Street bank, accessed the backstop at their regional Federal Reserve bank during the worst financial emergency since the Great Depression. The loans are far more generous than what banks get from the market. Trillion-dollar financial behemoths like Bank of America, JPMorgan Chase, and Citigroup accessed cheap Fed cash through the discount window, as did smaller firms like Proficio Bank, a Utah lender with just $125 million in deposits. After changing its legal status from an investment firm to a bank, Goldman Sachs also benefited from the Fed's discount window. A top Goldman executive had previously testified under oath to the Financial Crisis Inquiry Commission that it accessed the program simply to test its systems. In September 2008 -- the month that saw the federal government takeover Fannie Mae and Freddie Mac; the failure of Lehman Brothers, the largest bankruptcy in U.S. history; the forced-sale of Washington Mutual, the largest bank failure in U.S. history; and a government rescue of AIG, the world's largest insurer -- the Fed lent borrowers $1,574,142,741,934 through its discount window and emergency programs, documents show. During the same period, 22 foreign-based banks borrowed $56.6 billion on 42 separate occasions from the Fed's discount window, according to a Huffington Post analysis of Fed documents. The disclosures led Senator Bernie Sanders, an independent from Vermont, to write Fed chairman Ben Bernanke asking why the central bank lent U.S. funds to foreign firms. Sanders wrote that he had "serious concerns" in particular over the Fed's lending to Arab Banking Corp., the Libya-owned lender. The Federal Reserve did not respond to a request for comment.

How funny is that? We lent money to the very enemy we are attempting to vanquish 3 years later. I have to wonder who exactly is in charge of this country these days.